Tag Archive | Stephen L. Vargo

Service-dominant logic in business models – a workshop with Professor Vargo

Written by Katri Ojasalo

The two trending phrases in academic and business conversations are “service-dominant logic” (SDL) and “business model canvas” (BMC). Is there a connection between them? Or are they just two extremes: the first one an academic theory and the latter one a business tool?

In fact, they are quite far from each other. We can see that the BMC is clearly based on goods-dominant logic. This comes up for example in the use of terms, such as customer segments, channels etc. So, does this tool guide businesses to focus on more irrelevant issues and neglect the guiding principles of SDL: customer value and value co-creation? This was the notion that brought a group of Finnish service researchers together.

Professor Vargo commenting on our working version of a SDL-based Business Model Canvas

Professor Vargo commenting on our working version of a SDL-based Business Model Canvas

In fall 2012, service researchers from various Finnish universities were gathered to discuss the future of service research and service competences. During the discussion, we realized a common interest in further developing the BMC, which we all had been using in different contexts in teaching, research, consulting, etc. We saw that the BMC needs adjustments to be in line with SDL. Applying SDL in practice and truly understanding value co-creation can offer a very important competitive advantage for any organization. The BMC seems to be missing this understanding of the relevance of SDL.

To discuss and further develop this issue, we first formed an informal group that was soon changed into a Special Interest Group of the Finnish Service Alliance (FSAan association of more than 100 Finnish service researchers and companies interested in service research). The Special Interest Groups (SIGs) are forums for discussing and developing specific service-related themes and they are founded by the members of FSA.

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